$10.0 MILLION
It appears Messagemedia is anxious to get its earnings out #reply-12821951 since all else has failed to get the price of their stock up; eg. Robbie Stephens reiterated its BUY twice (1/26 and 2/3), Messagemedia reported the Grey partnership twice (2/8 and 2/9, which by the way is probably second only to the Yahoo! contract). Even with a peek at $4.5 million new business #reply-12683274, price just seems to be hanging onto $20/shr. Oops, did I see it dip to $19 late in the day. May all those who sold today be punished tomorrow.
I'm on record of projecting $17.7 million #reply-11685579 in total pro forma revenues for the year (1999). However, I've gone back and looked at that number, and for the life of me, I don't know how I calculated it. Based on the 8-K filed with the SEC 8/20/99, I meant 200% of 1998 pro forma revenues of $6.76 million which is $13.4 million. In October, this looked like a significant goal (ie, $13.4 million), but with the info that has come out since, this number is low (ie, $13.4 million) and my serendipitous $17.7 million appears more in line with estimates.
Get your 8-K here...
sec.gov
Here's why 200% growth over 1998 revenues is too low:
The 8-K shows total pro forma revenues of $5.1 million for the first half of 1999. Add $3.6 million from Q3 to get nine months revenue of $8.7 million. Thus Q4 has to come in at $4.7 million (13.4 - 8.7 = 4.7) to obtain 200% revenue growth in 1999.
Considering the $4.5 million sneak peek on Q4 numbers #reply-12683274, it is clear Messagemedia will beat 200% revenue growth for 1999.
Here's my guestimate.
$4.5 million - New Business. This is a freebie considering Messagemedia has announced $4.5 million in new contracts for Q4 #reply-12683274.
$5.1 million - Same Store Sales. Messagemedia had $3.6 million pro forma revenues in Q3 #reply-11705268. But this did not include 1-1/2 months sales from Revnet Systems and Decisive Technology which I estimate at $0.5 million (3.6 - 3.1 = .5). Thus same store sales would have been around $4.1 million all things being equal. However, the Christmas season is a factor and therefore we can expect same store sales to be significantly higher because of increased use of their services by e-tailers. This is the wild card in my guestimate; ie, how much of an increase can be attributed to Christmas? Based on Yahoo!s increase in revenues Q3 $155 million to Q4 $201 million, I'm going to say 25% increase in same store sales; therefore, $4.1 x 1.25 = $5.125 = $5.1 million.
$0.4 million Interest Income. This is that little discussed revenue I said I'd disclose in the guess-off #reply-12612458. Recall that $42 million placement late in Oct 99 #reply-11699808, well, Messagemedia didn't spend all that money overnight and we should see some interest income. Let's see, I'm figuring 6% over 2 mo is equivalent to 1% x $40 million = $400,000. Of course, a smart ass wouldn't speak to this directly so I rephrased it as number of shares (45 million shrs) which were about equal at the time #reply-12615996 and JBruin corrected my math #reply-12613607.
In short, Messagemedia is going to report a stellar Q4 any way you cut it. Analysts will call it better than expected #reply-12420838. The Grey contract coupled with the build out in Europe suggests they will be able carry record revenue growth (>50%)past the next quarter. It's a great company with great revenue growth (4 times that of Cisco). Thus far, its been a Goldilocks stock; ie, not too hot and not too cold. Once investors get the message, the sleeper will awaken.
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